Monday, July 9, 2012

Obama tax announcement

Obama is about to start another pointless fight today. He will call for a one year renewal of the Bush tax cuts for those making $250,000 or less. He is doing so for political reasons - IE - To pursue his campaign narrative that Romney is the candidate for the rich and that conversely, Obama is the honest servant of middle-low income Americans (Obama isn't). There is one central problem with the President's plan. In calling for a $250,000 cap, Obama is again illustrating the absurdity of his debt reduction platform. The longer America's debt crisis remains unresolved, the more likely it is that the markets will force a solution. In this event, low and middle income americans would bear the brunt of the negative fall out (higher income americans would be able to shelter their assets more effectively). By claiming that his tax plan balances debt reduction with economic necessity, Obama is behaving disingenuously. His plan offers no chance of substantive debt reduction. As such, if enacted, today's announcement would simply add a further tax burden in the context of an already confused tax system that is helping maintain a stagnant, rudderless economy.